Kristina Roberts
Long ago, Elon Musk bought the company Twitter, and then he changed many things inside. Some of the top leaders at Twitter were let go. They say they were promised large payments called “severance pay” for when they left. But after Musk’s takeover, they say they did not receive that money. These former executives decided to sue Musk and his new company, called X, for the money they believe they were owed.
The lawsuit is by four former leaders: Parag Agrawal, who was the CEO; Ned Segal, who led finance; Vijaya Gadde, who was the top legal officer; and Sean Edgett, who was the general counsel. They together claimed Musk and X owe them about $128 million in unpaid severance. They said that before Musk bought Twitter, the agreement was that if they were fired, they would be paid a full year’s salary plus stock awards. After Musk took over, they allege he accused them of wrongdoing and dismissed them without honoring that deal.
Musk and his company denied that the payments were owed. They said the firings were based on poor performance, not because the executives were promised something under contract. Also, Musk’s defenders argued that some of the reasons given by the executives were excuses to force the company to pay. The debate became deeply personal and legal, and it drew public attention because the sums involved were huge and because Musk is a well-known figure.
In the end, Musk and X decided to settle the case out of court. The exact terms of this settlement were not made public. The settlement was announced through a court filing in San Francisco. A judge postponed deadlines and hearings so the final agreement could be completed. Because the settlement is still being finalized, many details remain secret.
This lawsuit was not the only trouble Musk faced after buying Twitter. Earlier, many regular Twitter employees who lost their jobs also sued X, claiming they were owed $500 million in severance pay. That case, too, was put to rest by a settlement, though its terms are also confidential. These legal battles reflect how messy the transition was when Musk acquired Twitter for $44 billion. He immediately laid off more than half of its workforce and rebranded Twitter as X.
The four former executives said Musk falsely accused them of misconduct just to justify firing them and avoiding paying what was owed. They alleged that Musk tried to renege on the purchase agreement and used that as reason to withhold their severance. On the other side, Musk and X argued that the dismissals were due to lack of performance and proper business reasons—not contractual promises.
Because the agreement is secret and still being finalized, we do not know exactly how much each person will receive. We also don’t know whether the settlement fully satisfies their demand for one year’s salary plus stock options, or part of it. The court is holding off extra hearings and deadlines to let the parties finalize their deal.
These legal challenges are part of a larger set of lawsuits Musk has faced since buying Twitter. Many former employees, both high-ranking and rank-and-file, claimed they were unfairly treated or not paid what they were owed. Musk’s critics argue that such disputes reveal problems of fairness, accountability, and power when a very rich person takes control of a big company. Supporters argue he was within his rights to reorganize and make decisions he believed necessary for the business.
Though the settlement ends this particular battle, it leaves questions unanswered. Will other lawsuits keep coming? Will public trust in Musk’s businesseses suffer? And how will companies in the future plan severance agreements, especially when big changes like a takeover happen?
Even though we don’t know the final numbers, this settlement shows that large legal claims can be settled quietly. It also shows that contracts and promises made before a sale can lead to big problems if they are ignored or disputed later. For the executives, the settlement may bring relief after a long fight. For Musk and X, settling avoids prolonged court battles and public scrutiny. Yet, as many observers note, when big companies change hands and decisions are made rapidly, conflicts over money and promises are likely to surface—and those conflicts often land in court.
